The advent of technology advancement has made life easier for many people. Technology makes life easier for merchants by allowing them to transact a sale even when customers do not have sufficient cash for the purchase. The merchants offer credit card purchase backed by credit card issuing institutions who then own the receivable. The technology also makes it possible for consumers to make a purchase without ever visiting a store. Consumers can place their order from a web site or by telephone and pay with their credit cards. This new model in retailing relies heavily on technology and more importantly on the availability of credit information.
Having good credit is becoming an important factor in a person's life. A good credit rating is becoming a precious commodity in today's society. A person with good credit can apply for credit cards and make purchases without carrying cash. A person with good credit can obtain a mortgage loan easily and pay favorable interest rates. Society makes life easier and more affordable for people who have good credit.
In contrast, a person with less than perfect credit may be required to pay higher interest rates for a credit card. A person with bad credit may not be able to obtain a mortgage loan to purchase a house, and even if he is able to obtain a loan, it is likely that he will be required to pay a higher interest rate and to put down more money for the down payment. Bad credit may even prevent a person from obtaining the necessary loan to purchase an automobile for transportation purposes.
Although important to a person's life, a person's credit is affected by many factors. Credit is often impacted by one's action. Late mortgage payments and failure to repay student loans will damage one's credit. Credit may also be impacted by actions from third parties. Failure to record a car loan payment by a financial institution may lead the financial institution to report that the consumer is late in his payments. A retailer's mistake in reporting a failure for payment from someone with the same name may affect one's credit. Often a person does not learn about the damage to his credit until financial institutions turn down his application for credit, in which case he has to go through a painful process to clear mistakes and errors in order to restore his credit.
With such a strong impact on people's lives, more and more people are closely guarding their credit. More people want to know as soon as possible when their credit information changes for whatever reason, so they can take early action and not be caught by surprise.
However, recording and reporting errors and mistakes are not the only reason for changes in a person's credit rating. A new crime known as identity theft has caused problems for many people by damaging their credit rating. This new crime is the product of technology advancement. Technology now enables thieves to steal a person's identification information and usurps the person's identity without the person knowing it until the person's credit is damaged.
Thieves can steal information about a person through a variety of sources, such as a credit card receipt or an on-line database housed by merchants. Once a thief obtains some personal information on a person, the thief can impersonate this person in a variety of transactions. A thief can request a credit card based on the credit of that person and place purchase orders with no intention of ever paying for them. A thief may also change the address of a person in order to get more financial information about that person and do more damage to the credit rating of that person. In addition, all of this is done without the person ever knowing it or having a chance to stop it.
Often consumers only learn that someone has stolen their identities after the damage to their credit rating is done. The suspicions usually arise when a credit request is declined, or a loan application turned down, or worse when a collection letter is received.
To clear up their names and restore their credits, consumers need to report the crime to police, alert credit rating agencies, and essentially prove that they are not responsible for the delinquencies. This task can be frustrating and time consuming.